That principle has been used very often in history to justify not issuing money for free, and it has been demonstrated to be correct if money is issued for free, and there is no creation of product, then the money devalues.
MMT sees money creation as the method governments use to deploy/create resources in the private sector so they are available for its needs. It is a unit of measure, like ohms or voltage, describing the value given to real goods and services. By maintaining its monopoly on money creation the issuing government becomes the price setter for the things it buys.
MMT recognizes fully the inflationary impact of simply creating money where there is no potential of increasing resources available in the economy. However, it also realizes that maximizing productivity requires money investment without the overhead of private sector debt.
The numerical value of spending alone is not relevant without knowing the availability of the things the spending was meant to deploy/purchase.
Anything available and priced in the government's unit of account is "affordable" without major inflation risk. This can best be measured by the achievement of "full" employment for everyone who desires a job.
Anything less is an indication of our government spending too little or taxing too much (given that the markets aren't monopolized to prevent competition). The opposite, of course, is indicated when it spends too much or taxes too little, or spends/taxes in the wrong economic sectors. Either will result in inflation.
I think MMT explains the Weimar demise of money, but does it also explain the events around the negative oil prices?
Demand for petroleum products is severely curtailed when the world's economy is shut down and workers are sitting at home conducting business online. Oil producers also had similar problems with delivery as any others did, so the shutdown was stabilizing in the energy market.
If workers were still commuting and business was still producing products at rates matching that pre-Covid the oil demand would be much higher and any delivery curtailment would have given us stagflation similar to what we experienced in the '70s. While current inflation may appear to be similar to then, its onset after production began rebounding suggests that it is largely due to corporate management protecting shareholders (and themselves) from any harm by plugging shareholder equity into their pricing formulas as a constant.
The proof of whether I am right about this or not will be seen very soon, if they manage to get inflation down, by imposing closed box economics on everyone, despite still scaling up solar energy, then I will shut up and submit to the slavers :)
Investment in supply chains, while both too little and too late, will bring down any "natural" inflation. Cheaper energy could certainly aid this but isn't really a priority of the current Congress or administration due to the perversion of our political system over several decades. Congress is still trying to sneak very unpopular support of pipelines into legislation with "feel good" titles.
The route the Fed is taking (mostly out of frustration from not having any other options) will work eventually because it is extremely damaging to our overall economy while also widening the wealth gap via higher returns on bonds. The most obvious way to stop a ship's momentum is with a torpedo, but is that what we want from our government in economic management?
